Federal government decreases Standard Mileage Rate for 2016

The federal government has decreased the allowable per-mile reimbursement for employees who drive their vehicles for business and using their vehicles for medical care and moving expenses.

Employers may reimburse their employees for operating an automobile for business, charitable, medical, or moving expense purposes. They can calculate those reimbursements using a variety of methods including: travel days, miles, or the fixed-rate allowance.

Each year the Internal Revenue Service evaluates the Standard Mileage Rate to determine whether the rate is reasonable based on driving costs and whether the rate should be increased, decreased or remain the same. The IRS takes into account costs such as the price of gasoline and oil and other expenses including insurance and repairs.

New published rates include:
• The standard business mileage rate for auto expenses has decreased to 54 cents per mile for 2016 (from 57.5 cents per mile in 2015).
• The rate for charitable uses remains the same at 14 cents per mile.
• The rate for driving for medical care has decreased to 19 cents per mile for 2016 (from 23 cents per mile for 2015).
• The rate for deductible moving expenses using an automobile has decreased to 19 cents per mile for 2016 (from 23 cents per mile for 2015).

The maximum standard automobile cost under a fixed-and-variable-rate (FAVR) allowance method has decreased from $28,200 for 2015 to $28,000 for 2016 (excluding trucks and vans). The standard cost under a FAVR allowance for trucks or vans has increased from $30,800 for 2015 to $31,000 for 2016.

If the allowance paid to an employee exceeds the amount allowed by the federal government, the excess amount must be reported as wages and is subject to income tax withholding and payment of Social Security, Medicare and federal unemployment taxes.
For more about “Business Use of Car,” visit the IRS website at: https://www.irs.gov/taxtopics/tc510.html or call the experts at BCN if we can answer your employment questions, including those about employee reimbursement policies and current guidance and legislation.

 

 

BCN-Services-logo

Susanna Achatz, Payroll Manager

Minimum wage laws continue to be a hot employment topic

BCN Services is a full service Human Resources partner, and one of the ways we help keep our clients compliant is to ensure they are updated regarding changes in the minimum wage laws in their state and or localities. The minimum wage and tipped wage requirements are among the main topics of discussion amid the current political and economic news cycle.

BCN has updated all our clients affected by the recent changes in Minimum and Tipped wages throughout the country. We are also supplying updated compliance posters to all our customers affected by the changes.

How much do you know about the minimum wage and tipped wage levels in the U.S.?
The federal minimum wage has not increased since 2009, although many states have adopted new, higher minimum wage standards. The current federal minimum wage is $7.25 per hour and $2.13 per hour for tipped workers.

There are 7 states currently with either no minimum wage or a minimum wage rate listed below the federal rate. In these states, states the federal minimum wage applies. They include:
Alabama, Georgia, Louisiana, Mississippi, South Carolina, Tennessee, and Wyoming.

Twenty three local municipalities have adopted minimum wages above their state minimum wage. They are: Albuquerque, New Mexico; Berkeley, California; Bernalillo County, New Mexico; Birmingham, Alabama; Chicago, Illinois; Emeryville, California; Las Cruces, New Mexico; Louisville, Kentucky; Montgomery County, Maryland; Mountain View, California; Oakland, California; Palo Alto, California; Portland, Maine; Prince George’s County, Maryland; Richmond, California; San Francisco, California; San Jose, California; Santa Clara, California; Santa Fe City, New Mexico; Santa Fe County, New Mexico; SeaTac, Washington; Seattle, Washington; and Sunnyvale, California.

The following states have increased their minimum wage in the past 6 months. The old minimum wage is in parentheses. All wage rates noted are per hour.

Michigan – effective January 1, 2016:
Minimum Wage: $8.50 ($8.15)
Tipped Wage: $3.23

Note: Michigan also has scheduled increases with annual indexing beginning April 1, 2019:
January 1, 2017 – $8.90
January 1, 2018 – $9.25

Other states include:

Alaska – effective Jan., 1 2016
Minimum Wage: $9.75 ($8.75)
Tipped Wage: $9.75

Arkansas – effective Jan. 1, 2016
Minimum Wage: $8 ($7.50)
Tipped Wage: $2.63

California – effective Jan., 1, 2016
Minimum Wage: $10 ($9)
Tipped Wage: $10

Colorado – effective Jan. 1, 2016
Minimum Wage: $8.31 ($8.23)
Tipped Wage: $5.29

Connecticut – effective Jan. 1, 2016
Minimum Wage: $9.60 ($9.15)
Tipped Wage: $6.07

Hawaii – effective Jan. 1, 2016
Minimum Wage: $8.50 ($7.75)
Tipped Wage: $8.50

Massachusetts – effective Jan. 1, 2016
Minimum Wage: $10 ($9)
Tipped Wage: $3.35

Minnesota – effective Aug. 1, 2015
Minimum Wage: $9 ($8)
Tipped Wage: $8

Nebraska – effective Jan. 1, 2016
Minimum Wage: $9 (8)
Tipped Wage: $2.13
New York – effective Dec. 31, 2015
Minimum Wage: $9 ($8.75)
Tipped Wage: $7.50

Rhode Island – effective Jan. 1, 2016
Minimum Wage: $9.60 (9)
Tipped Wage: $3.39

South Dakota – effective Jan. 1, 2016
Minimum Wage: $8.55 ($8.50)
Tipped Wage: $4.28

Vermont – effective Jan. 1, 2016
Minimum Wage: $9.60 ($9.15)
Tipped Wage: $4.80

West Virginia – effective Jan. 1, 2016
Minimum Wage: $8.75 ($8)
Tipped Wage: $2.63

BCN will continue to keep you up to date and in compliance with all federal, state and local laws. By allowing BCN to handle your administrative functions, as well as your Human Resources needs, you can continue to focus on your business’s bottom-line results.

Contact BCN Services today to learn more about our programs.

 

 

Rick Dyer (200x193)

Rick Dyer, Vice President Sales